Electric car maker Tesla is will cut more than 10 percent of its workforce worldwide. Reuters reported this on the basis of a company document. As competition in the market for such vehicles has intensified, Tesla’s car sales have fallen recently, as a result of which the US company is trying to cut costs.
Tesla is the world’s largest car manufacturer by market value. In December last year, their number of employees worldwide was 1 lakh, 40 thousand, 473 people. Reuters reported that Tesla’s internal document did not say exactly how many workers would lose their jobs.
Tesla CEO Elon Musk said in the document, ‘As we prepare the company for the next phase of growth, we must look at all kinds of things to reduce costs and increase productivity. It’s very important.’
The document also claims that, as part of this endeavor, every aspect of the organization has been examined. Subsequently, the company will decide to lay off more than 10 percent of its global workforce. Tesla described it as a difficult decision.
Reuters contacted Tesla for a comment but did not immediately receive one. Tesla shares fell 0.3 percent before the stock market opened on Monday.
Just this month, Tesla reported that its car sales were down worldwide. This is the first time such an incident has occurred in the last four years. Tesla could not stop this decline even by lowering the price of the car. And in this situation, the company announced plans to lay off workers.
Tesla expects car sales to decline in 2024. Tesla’s sales were growing rapidly in previous years.
Due to high interest rates, consumers are now avoiding expensive products. And at this time, Tesla is not able to bring new models of electric cars except for their old models. At the same time, in China, the largest global market for such cars, local automakers are launching new models of low-cost cars.
Reuters reported earlier this month that Tesla had scrapped a plan to make low-cost cars. Tesla has been promising such a car for a long time. Investors believed that bringing a lower-priced model to the market would give Tesla a big boost in sales.
Tesla is now looking for ways to increase its profit margins on car sales. Tesla’s profits have been reduced due to several rounds of price cuts. Their gross profit margin in the fourth quarter of last year was 17.6 percent, the lowest in four years. In February last year, Tesla laid off 4 percent of its workforce in New York.
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